Belayab motors PLC is engaged in assembly of commercial vehicles import and distribution of 2. various type of motors vehicle, heavy truck and machineries with after sales service on march 1. 2015 the company cash balance indicated in bank account was br. 13,550,500. .00. during march the company imported 20 diesel vehicle motor with cylinder capacity 1300 C.C from Germany costing FOB EURO 40,000 and birr 31,800 for insurance and 88,200 was paid for freight to the imported goods. Additional information Duty and tax applicable on imported diesel vehicle in Ethiopia Duty rate 35% ji. Excise tax30% iii. VAT 15% iy. Sur tax 10% Withholding tax 3% EXCHANGE RATE DURING THE MONTH (CONSTANT) SELLING BUYING EUR 22.00 21.57

Calculate the total cost of importing the 20 diesel vehicles:

FOB cost: 20 vehicles x €40,000 = €800,000
Insurance cost: €31,800
Freight cost: €88,200

Total cost in Euro = €800,000 + €31,800 + €88,200 = €919,000

Convert total cost to Ethiopian Birr:
€919,000 x 22.00 = Br. 20,218,000

Calculate the duty and taxes applicable on the imported vehicles:
Duty: 35% of €800,000 = €280,000
Excise tax: 30% of €800,000 = €240,000
VAT: 15% of €800,000 = €120,000
Sur tax: 10% of €800,000 = €80,000
Withholding tax: 3% of €800,000 = €24,000

Total duty and taxes in Euro = €280,000 + €240,000 + €120,000 + €80,000 + €24,000 = €744,000

Convert total duty and taxes to Ethiopian Birr:
€744,000 x 22.00 = Br. 16,368,000

Calculate the total cost of importing the vehicles including duty and taxes:
Total cost in Birr = Br. 20,218,000 (import cost) + Br. 16,368,000 (duty and taxes) = Br. 36,586,000

Subtract the total cost of importing the vehicles from the initial cash balance to find the new cash balance:
New cash balance = Br. 13,550,500 (initial cash balance) - Br. 36,586,000 (total cost of importing vehicles) = Br. -23,035,500

The new cash balance after importing the vehicles would be a deficit of Br. 23,035,500.